Generic drugs have become the mainstay of pharmaceutical therapy, accounting for more than 80% of US prescriptions, as more blockbuster pharmaceuticals have lost patent protection. A range of legislative and regulatory actions have facilitated consumer access to safe, high-quality generic products, although manufacturing lapses and product quality problems have created critical shortages in important medicines, casting a shadow over the industry's success.

FDA marked the one-year anniversary of the Generic Drug User Fee Amendments (GDUFA) of 2012 in June by noting that the agency collected $255 million in user fees—a little short of its $299 million goal for fiscal year 2013, but enough to hire 165 new staffers for the Center for Drug Evaluation and Research (CDER) and to expand the industry "self-identification" program to ensure accurate fee assessment and to improve generic industry supply-chain information.

A GDUFA steering committee, which includes representatives from CDER plus the FDA commissioner's office and the Office of Regulatory Affairs (ORA), is shifting focus to enhancing the generic-drug review program to meet GDUFA performance commitments. That assignment falls to Office of Generic Drugs (OGD) acting director Kathleen Uhl, who has made some progress in reducing the application backlog and enhancing review processes. But Uhl and her staff face considerable challenges, particularly in the face of further organizational changes slated for OGD.

Legal Controversies
Generic drugs also have been in the spotlight recently due to cases before the US Supreme Court involving pay-for-delay patent settlements and safety labeling issues. Manufacturers lost an important case in early June 2013 when the Justices made it more difficult for brands and generics to negotiate "reverse payment" patent settlements. A majority ruled in the Federal Trade Commission v. Activis case (docket no. 12-416) that the Federal Trade Commission (FTC) has the right to challenge these deals as anticompetitive and harmful to consumers. However, the Court stopped short of declaring these arrangements per se illegal. Both brand and generics firms have insisted that pay-for-delay agreements avoid costly litigation and actually permit generics marketing prior to patent expiration, but the ruling is slated to discourage these settlements in the future.

A majority of Justices, though, supported manufacturers and FDA in Mutual Pharmaceutical Co. v. Bartlett (docket no. 12-142). The case raised important questions for both brands and generics about whether lower courts can challenge FDA regulatory decisions, and whether generics makers should revise labels to reflect important new safety information when the brand does not do so. A patient who took Mutual's generic product and suffered adverse events sued and won a $21 million judgment based on the company's failure to warn of the drug's potential dangers. Mutual argued that the long-marketed anti-inflammatory and its label were approved by FDA, and the Justice Department agreed that states can't undermine the FDA approval process by overriding federal regulatory policy. A sharp dissent from some Justices in this 5-4 ruling, along with strong complaints from consumer activists, puts pressure on FDA to revise regulations to allow new warnings on generic drug labels, even if the information differs from that of the reference product.

The High Court is likely to revisit this issue as other cases emerge involving state versus federal consumer protection rules. In fact, one failure-to-warn suit has been brought against a brand manufacturer, even though injury was caused by a generic.